Crypto exchange Binance has officially entered El Salvador. The news came shortly after it was revealed that the exchange had sold its reserves of USD coins (USDC) for Bitcoin (BTC) and Ether (ETH) in the wake of the Silvergate Bank collapse. Meanwhile, markets are still excited after PayPal launched a new US dollar-backed stablecoin called PayPal USD (PYUSD) – issued by Paxos Trust Co.
Bitcoin-friendly El Salvador has granted Binance a license to offer crypto services in the Central American country, potentially opening the door to wider adoption of digital assets.
On Aug. 8, Binance announced that the Central Bank of El Salvador approved its exchange application for a Bitcoin Services Provider License — it was also granted a Digital Asset Services Provider License by the National Commission of Digital Assets. Min Lin, who heads Binance’s Latin America operations, said the Salvadoran licensing process took “many months.”
#Binance is now El Salvador’s first fully licensed crypto exchange!
With this, Binance has approvals and registrations in 18 markets worldwide, more than any other crypto exchange including France, Italy, Spain, Sweden and Dubai.https://t.co/BITj9zxdcZ
— Binance (@binance) August 8, 2023
El Salvador fully adopted Bitcoin in 2021 after becoming the first country to recognize the digital asset as legal tender. The Salvadorian government has described BTC as a tool to attract foreign direct investment, create new jobs and reduce dependence on the US dollar.
Binance Enters “Bitcoin Land”
Binance sold USDC for BTC and ETH after Silvergate bank collapse: PoR report
Binance’s most recent Proof-of-Reserves (PoR) on Aug. 1 revealed that the crypto exchange converted its USD coin (USDC) reserves into Bitcoin (BTC) and Ether (ETH) right after the collapse of Silvergate Bank has.
Balance of Binance reserves between December 2022 and June 2023. Source: Binance
Binance started converting customers’ USDC to Binance USD internally in September, but also had a significant amount of USDC in its reserves at the time.
PayPal USD is a boon for Ethereum, not for the decentralization: community
According to the crypto community, PayPal’s new Ethereum-based stablecoin, PayPal USD (PYUSD), could herald the mainstream adoption of Ethereum, albeit at the cost of greater centralization.
The new stablecoin PayPal USD was announced on August 7th and will soon be available for US customers.
While Ethereum bulls such as Anthony Sassano and Ryan Sean Adams hailed the announcement as a big win for Ethereum adoption, others pointed to the smart contract code that would allegedly allow the company to freeze and wipe out funds.
The new Paypal USD stablecoin has an “AssetProtection” role that can wipe your funds in two transactions (first “freeze”, then “wipeFrozenAddress”).
In smart contract security, we call this a “centralization attack vector” pic.twitter.com/RsmqvsnKvi
— Pashov (@pashovkrum) August 7, 2023
Digital asset advocate Sarah Hodder believes that many characteristics of PayPal’s stablecoin are similar to those of a censorship-free central bank digital currency. Another smart contract reviewer noted that PYUSD’s smart contract can be modified by PayPal at any time.
Yes, PayPal’s stablecoin is centralized.
No, that doesn’t make it any less cool that PayPal has a stablecoin.
Since Ethereum is a settlement layer for all types of assets, it means that different types of assets exist on the network and you can choose which ones you want to use.
— sassal.eth (@sassal0x) August 8, 2023
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risk and readers should do their own research in making their decision.
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